Analysis by Dr. Nancy Yamaguchi


The last week of June and the days leading up to the Fourth of July holiday brought a strong rally in oil prices, but prices fizzled out after the fireworks. West Texas Intermediate (WTI) crude oil prices sank over last week’s truncated holiday week, losing $2.05 over the week. Prices continued to weaken overnight and in today’s early morning trading, and WTI crude prices have retreated below $44 per barrel (/b). Product prices also fell overnight, though current prices are trending back up slightly.


Last week’s supply and demand data from the Energy Information Administration (EIA) were primarily bullish, with across-the-board draws of crude and refined product inventories, plus an increase in apparent demand. Moreover, the Bureau of Labor Statistics (BLS) reported that non-farm payroll employment rose by 222,000 in May, surpassing predictions of 178,000.


Increasing supply seemed to overshadow these statistics. The EIA reported that U.S. crude production rose by 88 thousand barrels per day (kbpd) during the week ended June 30. However, as we noted last week, stormy weather had shut in production during the week ended June 23. It was not surprising that crude production rebounded thereafter.


Yet prices weakened Friday when Baker Hughes released its weekly active rig count, showing 12 more rigs entering the active count. The U.S. active rig count rose to 952 during the week ended July 7. This was the highest rig count since April 2016.


WTI crude prices are in the $43.75/b – $44.25/b range this morning. WTI opened at $44.35/b today, down by $1.00 from Friday’s opening price. Prices are $43.95/b currently, down by 40 cents from today’s opening price.


Diesel opened at $1.4512/gallon this morning. This was a drop of 2.63 cents (1.78%) below Friday’s opening price. Diesel prices declined by 4.19 cents over the course of last week. Current prices are $1.4435/gallon, down by 0.77 cents from today’s opening price.


Gasoline opened at $1.5064/gallon today, down by 1.74 cents, or 1.14%, from Friday’s opening. Prices finished last week 1.51 cents in the red. Current prices are $1.4848/gallon currently, down by a hefty 2.16 cents from today’s opening price.